Orix Corporation · TSE:8591
Orix — Q3 FY2012 Earnings Presentation
35 slides from Orix's earnings presentation, Jan 31, 2012
Slide 1: ORIX Corporation Conference Call: Third Quarter Consolidated Financial Results
ORIX Corporation (TSE: 8591; NYSE: IX) Conference Call Third Quarter Consolidated Financial Results For the Nine Month Period Ended April 1 – December 31, 2011 January 31, 2012 Haruyuki Urata Deputy President & CFO Shintaro Agata Corporate Executive Vice President, Head of the Treasury Headquarters
Slide 2: Disclaimer
Disclaimer These materials have been prepared by ORIX Corporation (“ORIX” or the “Company”) solely for your information and are subject to change without notice. The information contained in these materials has not been independently verified and its accuracy is not guaranteed. No representations,
Slide 3: Contents
Contents I. Overview p 3- 4 II. Segment Performance p 5- 7 III. Future Potential p 8-11 Summary p 12 Appendix p 13-26 Copyright Copyright©©2012 ORIX Corporation 2009ORIX Corporation All All rights rights reserved. reserved. 2
Slide 4: I. Overview (1) Net Income
I. Overview (1) Net Income 68.8bn in 3Q consolidated net income, up 35% year on year Achieved 89% of 77.5bn full year target Net Income* Profits by Segment (JPY Bn) (JPY Bn) 10/3 11/3 12/3 12/3 10/3 11/3 Full Year 3Q Full Year 3Q Full Year 3Q (forecast) *Net Income refers to Net Income Attributa
Slide 5: I. Overview (2) Base Profit
I. Overview (2) Base Profit Secured stable base profit, yield increased from previous fiscal year end Trend in Base Profit (Total) Note: Base Profit (JPY Bn) = Segment Profit-(1)-(2) (1) Gains on investment securities and brokerage commissions Real Estate Sales (net of cost) Gains on sale of real
Slide 6: II. Segment Performance (1) CFS, Maintenance Leasing
II. Segment Performance (1) CFS, Maintenance Leasing (JPY Bn) Top: 11/4-12, Bottom: 10/4-12 Profit Assets ROA Annualized Third Quarter Topics (After tax) Corporate Financial Services 9 Strong leasing and fee revenues 9 Kyuko-Lease brought into the Group (4Q consolidation) 9 Focused on recovery and e
Slide 7: II. Segment Performance (2) Real Estate, Investment & Operation
II. Segment Performance (2) Real Estate, Inv. & Ope. (JPY Bn) Top: 11/4-12, Bottom: 10/4-12 Profit Assets ROA Annualized Third Quarter Topics (After tax) Real Estate 9 Smoothly reduced assets, achieved year end target of 1.45tr 9 Stable yields for rental properties, decreased asset balance of proper
Slide 8: II. Segment Performance (3) Retail, Overseas Business
II. Segment Performance (3) Retail, Overseas Business (JP( Bn) Top: 11/4-12, Bottom: 10/4-12 Profit Assets ROA Annualized Third Quarter Topics (After tax) Retail 9 ORIX Bank expanded both mortgage and corporate loans 9 Increased ORIX Life Insurance contracts in force, stable investment-related incom
Slide 9: III. Future Potential (1) Domestic Corporate Sales
III. Future Potential (1) Domestic Corporate Sales Provide solutions to new business challenges as a Group Business Challenges Recovery Demand Client Electricity shortages and rate hikes sharing Smart Cities Information Implement renewable energy sharing, BCP Review Network capitalizatio
Slide 10: III. Future Potential (2) Real Estate-related: Operation
III. Future Potential (2) Real Estate-related: Operation Development of new operating facilities 9 March: Kyoto Aquarium May: Sumida Aquarium 9 April: ORIX Theater (Formerly Osaka Welfare Pension Great Hall) Kyoto Aquarium Dolphin Stadium 9 Strengths 1. Expertise - Operating Enoshima Aquarium sinc
Slide 11: III. Future Potential (3) Real Estate-related: Logistics
III. Future Potential (3) Real Estate-related: Logistics Logistic Facility Development 9 Investment and Development of 33 facilities 9 Currently hold 13 properties (inc'l under development) 9 Features - Strengths 1. Planning capability Yokohama Machida Interchange Logistics Center 2. Good location
Slide 12: III. Future Potential (4) Asia - Other
III. Future Potential (4) Asia - Other Steady profit trend Well balanced asset increase (JPY Bn) Asset and Profit Trend "Asia and Other" for "Asia and Other" Assets by Account (December 31, 2011) Other 5% Investment in Affiliates 13% Direct Financing Leases Investment Securities 34% 12% Installm
Slide 13: Summary
Summary Robust Performance 9 Achieved 89% of the 77.5bn yen yearly forecast 9 Influenced by tax revisions during the third quarter 9 Limited fourth quarter downside risk European Crisis is an opportunity for ORIX Recovery and electricity demand will become full-scale Maintain growth trajectory
Slide 14: Appendix
Appendix Copyright Copyright©©2012 ORIX Corporation 2009ORIX Corporation All All rights rights reserved. reserved. 13
Slide 15: Appendix (1) Trend in Performance
Appendix (1) Trend in Performance (JPY Bn) *1 Net Income Attributable to ORIX Corporation *2 The Shareholders’ Equity 2 and D/E Ratio 2 shown are presented on an adjusted basis which excludes the effect of consolidating certain assets or liabilities attributable to consolidated VIEs and our adoption
Slide 16: Appendix (2) Profit by Segment
Appendix (2) Profit by Segment (JPY Bn) * Income from discontinued operations (before applicable tax effect), net income attributable to noncontrolling interests and net income attributable to redeemable noncontrolling interests are included Copyright Copyright©©2012 ORIX Corporation 2009ORIX Corpor
Slide 17: Appendix (3) Assets by Segment
Appendix (3) Assets by Segment (JPY Bn) Copyright Copyright©©2012 ORIX Corporation 2009ORIX Corporation All All rights rights reserved. reserved. 16
Slide 18: Appendix (4) Fortification of Financial Stability
Appendix (4) Fortification of Financial Stability (JPY Bn) *1 Increase in ABS, CMBS (10.3 to 11.3) due to VIE- related effect Indicator Definitions D/E Ratio (1): Short and Long-term debt (excl. deposits) ÷ Shareholders’ Equity D/E Ratio (2): Short and Long-term debt (excl. ABS, CMBS and Deposits) ÷
Slide 19: Appendix (5) Liquidity Control
Appendix (5) Liquidity Control (JPY Bn) •Marketable Short-term Debt is the total of bond and MTN expected to reach maturity within 1 year and the balance of CP. * Share of Long-term Debt (2) is presented on an adjusted basis which excludes the effect of consolidating certain liabilities attributable
Slide 20: Appendix (6) Segment Results - 1
Appendix (6) Segment Results - 1 Corporate Financial Services (JPY Bn) Maintenance Leasing Copyright Copyright©©2012 ORIX Corporation 2009ORIX Corporation All All rights rights reserved. reserved. 19
Slide 21: Appendix (6) Segment Results - 2
Appendix (6) Segment Results - 2 Real Estate (JPY Bn) Investment and Operation Copyright Copyright©©2012 ORIX Corporation 2009ORIX Corporation All All rights rights reserved. reserved. 20
Slide 22: Appendix (6) Segment Results - 3
Appendix (6) Segment Results - 3 Retail (JPY Bn) Overseas Business Copyright Copyright©©2012 ORIX Corporation 2009ORIX Corporation All All rights rights reserved. reserved. 21
Slide 23: Appendix (7) Rental Properties, Condos, NRL and Specified Bonds
Appendix (7) Rental Properties, Condos, NRL and Specified Bonds Rental Properties in the Real Estate Segment (11.12) (JPY Bn) Rental Property NOI Yields and Vacancy Rate Trends (JPY Bn) Condo Asset Balance in the Real Estate Segment (JPY Bn) Trend in NRL and Specified Bond Balance (JPY Bn) (
Slide 24: Appendix (8) Provisions and Impairments
Appendix (8) Provisions and Impairments Trend in Total Provisions and Impairments* * Write-downs of long-lived assets, Write-downs of securities, Write-downs of equity-method affiliates, Write-downs of condominiums, etc.) (JPY Bn) Copyright Copyright©©2012 ORIX Corporation 2009ORIX Corporation All
Slide 25: Appendix (9) Asset Quality
Appendix (9) Asset Quality Asset Quality (JPY Bn) (1) (2) (3) (1) Loans that have some concern about collection. I.e. legal procedures, no payment for over 3 months, poor industry environment (2) Of the “Loans Individually Evaluated for Impairment,” loans that can be fully collected through collat
Slide 26: Appendix (10) Reconciliation Table of Non-GAAP Financial Measurement
Appendix (10) Reconciliation Table of Non-GAAP Financial Measurement These materials include certain financial measures presented on a basis not in accordance with U.S. GAAP, or non-GAAP measures, including long-term debt, ORIX Corporation shareholders’ equity and total assets, as well as other meas
Slide 27: Appendix (11) Reconciliation Table of Non-GAAP Financial Measurement
Appendix (11) Reconciliation Table of Non-GAAP Financial Measurement (JPY Bn) (*1) Deducted payable under securitized leases, loan receivables and investment in securities recorded in long-term debt of consolidated VIEs from total assets (*2) Deducted payable under securitized leases, loan receivabl
Slide 28: Macro Economy
Macro Economy Copyright Copyright©©2012 ORIX Corporation 2009ORIX Corporation All All rights rights reserved. reserved. 27
Slide 29: Stock Market
Stock Market Performance of Major Stock Markets since January 2008 120 Dow Jones (US) 100 FTSE100 (UK) SENSEX (India) 80 DAX (Germany) 60 Hang Seng (HK) Nikkei (Japan) 40 CSI300 (China) 20 0 08.01 08.07 09.01 09.07 10.01 10.07 11.01 11.07 12.01 Source: Bloomberg Copyright Copyright©©2012 ORIX Corpor
Slide 30: Macro Economic Indicators
Macro Economic Indicators Real GDP Growth in Japan National CPI (Ex Fresh Food) (QoQ Change) (YoY Change) (% Change) (% Change) 3 3 2 2 1 1 0 -1 0 -2 -1 -3 -2 -4 -5 -3 07.03 08.03 09.03 10.03 11.03 07.03 08.03 09.03 10.03 11.03 Source: Economic and Social Research Institute, Cabinet Office Source: M
Slide 31: Corporate Indices
Corporate Indices Industrial Production Corporate Bankruptcies (MoM Change) (Quarter) (%) (JPY Tril) (Cases) 10 8 4,500 5 6 4,000 0 -5 4 3,500 -10 2 3,000 -15 -20 0 2,500 07.03 08.03 09.03 10.03 11.03 07.03 08.03 09.03 10.03 11.03 Liabilities (lhs) Bankruptcies (rhs) Source: Ministry of Economy, Tra
Slide 32: Bank Lending in Japan
Bank Lending in Japan Tankan Corporate Average Bank New Loan Rate, 10-year JGB Yield and Long-term Prime Rate Diffusion Index (%) 30 3.0 2.5 20 2.0 10 1.5 0 1.0 -10 0.5 -20 0.0 07.03 08.03 09.03 10.03 11.03 07.03 08.03 09.03 10.03 11.03 Large Middle Small Average Bank New Loan Rate 10 Year JGB Yield
Slide 33: REIT Performance
REIT Performance Japan TSE REIT Index Yield Gap between J-REIT and JGB10Y (%) 3,000 12 2,500 10 2,000 8 1,500 6 1,000 4 500 2 0 0 07.03 08.03 09.03 10.03 11.03 07.03 08.03 09.03 10.03 11.03 REIT Yield Gap 10 Year JGB Yield REIT Yield Source: STB Research Institute, Bloomberg Source: Tokyo Stock Exch
Slide 34: Condo Sales & Office Rent/Vacancy
Condo Sales & Office Rent/Vacancy Tokyo Condo Sales Office Rent/Vacancy (Quarter) (Quarter) (Units) (%) 20,000 15 10 15,000 5 10,000 0 01.03 03.03 05.03 07.03 09.03 11.03 Tokyo Vacancy Rate Osaka Vacancy Rate 5,000 (Yen/3.3 ) 20,000 0 15,000 07.03 08.03 09.03 10.03 11.03 10,000 5,000 0 01.03 03.03 0
Slide 35: Additional Information
Additional Information For annual and more historical data please access our website. A list of major disclosure materials is given below. ORIX Website: URL: http://www.orix.co.jp/grp/en/ IR Website: URL: http://www.orix.co.jp/grp/en/ir/ Financial Reports: URL: http://www.orix.co.jp/grp/en/ir/librar